Kibaran Resources building strategic graphite province in Tanzania
Kibaran Resources (ASX: KNL)
is building a strategic graphite province in Tanzania with independent
consultants identifying an Exploration Target of between 60Mt and 200Mt
of graphitic schist at its wholly-owned Merelani Prospect.
Notably,
it is located just 15 kilometres from Richland’s Merelani graphite
mine, which has the largest historical production of graphite in East
Africa.
The company had recently extended its existing Memorandum
of Understanding with Richland Group to finalise terms for a binding
agreement to consolidate their Tanzanian graphite assets, building a
world class graphite province.
A 2,000 metre reverse circulation drilling program has been designed to test the validity of the exploration target.
The
timing of this program will likely be in conjunction with the drilling
planned at the historical graphite mine once the agreement has been
finalised.
Merelani Prospect
Independent
geological group CSA Global Pty Ltd, have estimated an Exploration
Target of between 60Mt and 200Mt of graphitic schist grading between 9%
and 12% total graphitic carbon within the Merelani Prospect.
The estimate is based on exploration and geological work which Kibaran completed at the Merelani Project.
Tonnage
and grade ranges were determined from a 3D block model which
incorporates grade based graphitic schist domains for the interpreted
zones.
Merelani-Arusha Graphite Project consists of seven
tenements and covers an area of 973.4 square kilometres about 15
kilometres east of the historic Merelani graphite mine.
Merelani Graphite Mine
The Merelani Graphite Mine commenced mining operations in 1995 and produced 6,776 tonnes of graphite.
Mineralisation
was initially identified to be sufficient for a 40 year operation at a
production rate of 15,000 tonnes per annum of high-grade, large flake
graphite of 97-98% carbon.
The last shipment of remaining
stockpiled concentrate in 1998, included a percentage of 99% carbon
which was produced through natural attrition and not chemical treatment.
This
is clearly a premium product given that the current graphite market and
Kibaran’s binding offtake agreement for the Epanko Deposit at the
Mahenge Graphite Project is seeking 94-97% carbon and a high
distribution of large flake greater than 180 micron.
The Merelani
graphite mine represents the largest historical production of graphite
in East Africa and only a fraction of the occurrence was mined prior to
mine closure.
Richland acquired the Merelani Tanzanite and
Graphite Mine in 2004 from African Gem Resources, which had modified the
graphite mining operation and plant to focus on tanzanite gem
extraction only.
Significant infrastructure and equipment
originally installed for the extraction and processing of graphite still
exist and are currently partly in use for Richland’s tanzanite mining
operation.
Under the MoU, Kibaran and Richland are working
towards legally binding agreements to consolidate their respective
graphite assets in the Merelani region in a joint venture.
Analysis
Today’s estimation of an Exploration Target of 60Mt to 200Mt of graphitic schist grading between 9% and 12%TGC for Kibaran Resources’ Merelani prospect is a key step towards its building the Merelani region into a graphite province.
Instrumental
to this strategy is the company’s agreement with Richland to
consolidate their respective graphite assets in a joint venture.
That
this includes the Merelani graphite mine that was historically the
largest graphite producer in East Africa is a definite plus.
Adding
further to this is the high-grade, large flake graphite that the mine
produced, which at 97% to 98% carbon represents a premium product
compared to the 94% to 97% carbon sought in the current market.
Proactive
Investors believes that Kibaran's current valuation of circa $11
million is primed for appreciation given news flow and catalysts ahead.
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